http://ir.tesla.com/releasedetail.cfm?releaseid=1054948
I'm not a TSLA shareholder, but tying CEO performance to company performance rather than an indifferently high salary seems reasonable to me.
https://news.ycombinator.com/item?id=16502607
So, it begs the question - What do shareholders do if something like this happens?
Additionally,
> But the success has also underscored the company’s dependence on its CEO -- a risk factor that’s routinely spelled out in regulatory filings.
> “Although Mr. Musk spends significant time with Tesla and is highly active in our management, he does not devote his full time and attention to Tesla,” the firm’s annual report said, noting that he’s also CEO of Space Exploration Technologies Corp.
So, it seems Tesla is dependent on Musk but it routinely highlights how he is not fulling paying attention to Tesla. The question becomes - why should they pay a part time CEO a full time salary? And what happens if Musk doesn't hit the target and they need to hire his replacement?
> The award could affect what Tesla has to pay to hire a potential successor, Glass Lewis said
It might change how other CEOs might view compensation at Tesla. They might push for even more aggressive remuneration.
So, its better not to open a door which cannot be closed later.
AFAIK, a big part of Musk's success is not forgetting this: What people build (which is probably everything you've ever interacted with) people can build differently; _especially_ things of contracts and concepts like compensation packages.
To put it another way; if the stockholders and board of Tesla decide to do something unusual like this, they could also easily decide to do another unusual thing and not repeat it.
Not just anyone can lead a company; not just anyone could (I presume) lead a company like Tesla. Any process by which you would select that level of uniqueness, it seems to me, must necessarily be unique itself.
Like much CEO pay, Musk's pay package is more about status than about motivating him.
Or is someone really going to try to make the case that he's kinda half-assing it right now?
For the average person, but who are you to decide? He clearly already spends his money productively by largely self-funding ambitious projects, and I suspect that he would be pursuing even more if he had infinite resources.
So even if the utility of the funds isn't consequential, a package like this might be one if the few ways to further incentivize a CEO like Musk.
Bill Gates for instance, although his model seems to be give it all away to good causes he believes can accomplish good. Elon still seems to believe more in his own capabilities to accomplish worthwhile things with it.
I expect he too has a little txt file somewhere on his desktop, with various amounts as milestones to unlock the next project.
Maybe at $22 billion he can afford to start asteroid mining and in orbit construction or something that would top his current accomplishments.
So I'm guessing he'd take that money and just privately fund SpaceX, like Jeff Bozos is doing with blue origin.
If his goal is to colonize Mars and you want him to sell cars, a good way to do that is to say "sell cars for 10 years and we'll give you enough capital to do in the following 10 what you couldn't do in 20 from today."
Yes there is. Presumably, if Musk proposed a compensation package, it’s because he wants that compensation, and if the compensation is tied to uncertain milestones, he’ll be motivated to get the thing he wants by trying to achieve those milestones. It’s not as though someone proposed this to Musk and he said, “yeah sure, whatever.”
> Like much CEO pay, Musk's pay package is more about status than about motivating him.
Status can be very motivating. Obviously no one is in it for the “marginal utility of wealth” at the level of wealth Musk has, but the ability to pay for basic needs strikes me as a pretty one-dimensional way to view the way money can be motivating.
Extremely wealthy people still clearly pursue more wealth, so it’s pretty straightforwardly motivating in some sense.
> Or is someone really going to try to make the case that he's kinda half-assing it right now?
It’s not really a matter of “half-assing”, it’s a matter of further aligning someone’s goals with the organization they’re leading. Your implication here seems to be that someone can’t do a better job than they’re doing unless they’re slacking.
> Tesla has set a dozen targets, each $50 billion more than the next, starting at $100 billion, then $150 billion, then $200 billion and so on, all the way to a market value of $650 billion. In addition, the company has set a dozen revenue and adjusted profit goals. Mr. Musk would receive 1.68 million shares, or about 1 percent of the company, only after he reaches milestones for both. [1]
[1]https://www.nytimes.com/2018/01/23/business/dealbook/tesla-e...